U.S. Session Forex Recap – May 12, 2016

  • U.S. crude oil inventories down by 3.4 million barrels
  • Business NZ manufacturing index rose from 54.7 to 56.5

The lack of top-tier releases from the U.S. left the Greenback defenseless against its currency rivals and vulnerable to stock market weakness.

Major Events:

Commodity price rally – The U.S. Energy Information Administration (EIA) spurred another round of rallies for crude oil, as the agency reported a decline of 3.4 million barrels in stockpiles versus the estimated gain of 0.1 million barrels. This suggests that oversupply concerns may be fading, underscoring their recent statement suggesting that the market is starting to stabilize.

WTI crude oil surged to $45.93/barrel while Brent crude oil rose to $47.42/barrel. Precious metals weren’t left behind as gold climbed to $1,279.20/ounce while silver reached $17.450/ounce.

U.S. equity slump – U.S. stock indices closed roughly 1% lower for the day, weighed mostly by disappointing earnings data from Disney and a weaker outlook for retailing giant Macy’s. The Dow 30 index fell 217.23 points to 17,711.12 (-1.21%), the S&P 500 index closed 19.93 points down to 2,064.46 (-0.96%), and the Nasdaq edged 49.19 points down to 4,760.69 (-1.02%). Sell in May and go away?

Major Currency Movers:

CAD – The Canadian dollar was one of the biggest winners in the U.S. session and it was able to hold on to most of its gains for most of the day, unlike it’s other comdoll peers.

USD/CAD fell to a low of 1.2831 before recovering, CAD/JPY rallied to a high of 84.55, EUR/CAD is testing support at the 1.4700 handle, GBP/CAD slipped from a high of 1.8627 to a low of 1.8551, and AUD/CAD is down to .9460.

GBP – Pound traders seem to be positioning for a downbeat BOE statement today, as the currency is starting to edge lower across the charts.

GBP/USD turned upon hitting a high of 1.4489, GBP/JPY fell from 157.30 to 156.40, EUR/GBP broke out of its short term consolidation to a high of .7920, GBP/AUD found resistance at the 1.9700 handle, and GBP/NZD retreated to 2.1185.

Watch Out For:

  • 11:50 pm GMT: Japanese current account balance
  • 1:00 am GMT: Australian MI inflation expectations (3.6% previous)
  • 5:00 am GMT: Japanese Economy Watchers Sentiment index (44.9 expected, 45.4 previous)

See also:

Asian Session Recap

London Session Recap

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